Don't let a car accident or breakdown ruin your holiday

Many motorists drive across Europe unaware that they're not fully covered by insurance, warns David Prosser

The good news is that if you are driving in the European Economic Area (the European Union plus a handful of non-member states, such as Switzerland), you no longer need a "green card", the international certificate of insurance. By law, your British motor insurer must cover you when driving in the EEA, to at least the minimum legal requirement in the country you're in.

However, Graeme Trudgill, technical services manager at the British Insurance Brokers Association, is worried this may wrongly encourage people to be complacent. "You won't necessarily have complete protection," he warns. "While some insurers will give you the same comprehensive cover you enjoy at home when you're abroad, the cheaper companies may only offer third-party insurance."

According to the AA, at least a third of insurers require motorists to pay extra if they want their comprehensive cover to apply in Europe. It believes many drivers have no idea they only have third-party insurance while abroad. Up to 250,000 British motorists set off on holiday each year without realising they are not fully covered, the AA says.

Drivers with third-party cover will not be entitled to reclaim repair costs if they're involved in an accident that is not entirely the responsibility of another motorist. They may also have to shell out to cover the cost of getting a damaged vehicle back to the UK.

Check your insurance policy carefully before setting off. A fee of about £25 a week is typical if you want to add comprehensive cover in Europe to a policy that does not currently offer this. If you're a frequent driver overseas, it may be worth paying a bit more for cover that includes comprehensive insurance while abroad.

However, read policies carefully. Most insurers only cover you for a limited number of days' driving on the Continent. Up to 60 or 90 days a year is standard. It may also be worth asking your insurer to provide copies of your insurance documents in the language of the countries where you will be travelling.

An accident is not the only disaster that drivers can suffer. The AA is also concerned about the number of people whose holidays are blighted by a mechanical breakdown. Kevin Sinclair, managing director of the AA's insurance arm, says: "We would encourage drivers to take out European breakdown cover - if the worst comes to the worst, this will at least enable you to continue to enjoy your holiday while your broken-down vehicle is repaired or repatriated."

Standard breakdown cover from the AA, the RAC and Green Flag, the three companies that dominate the market, will not apply if you are driving overseas. That could mean paying through the nose to local mechanics if your car breaks down. And if the problem is not easy to fix, you could be left stranded.

Richard Mason, of internet-based price comparison service Insuresupermarket, says going away without breakdown cover can prove disastrous. "Breaking down is bad enough, but if you are in a country where you don't speak the language, and don't know the names or numbers of the local breakdown services, you could ruin your holiday," Mason says.

One option is simply to add European cover to your existing breakdown insurance for the period while you are away from home. The AA and RAC charge members from £8 and £12 a day respectively for add-on cover, according to Insuresupermarket. If you're away for any length of time, a policy that includes European cover all year round may work out cheaper.

But tread carefully. As the table shows, the three big players in breakdown cover are the most expensive, even though they don't necessarily perform any better when it comes to responding to calls from stranded motorists. However, the motoring giants point out that these policies are usually based on one person, driving any car, rather than a particular vehicle.